Full-Time Fund Update For January 2017

My Full-Time Fund is my dividend growth stock portfolio. I think it’s an apt name for it, because it works full time so I don’t have to.

Indeed, the Fund generates five-figure dividend income for me that, when combined with other sources of passive income, allows me to choose my endeavors not based on money but rather happiness and purpose. And that is, in my view, how life should really be lived.

The Fund has undergone a lot of changes over the years – changes which I’ve documented as much as possible along the way. And it’s in that spirit of openness and transparency that I continue revealing to the world exactly where I’m putting my money to work (and keeping my money at work).

I’m incredibly proud of the collection of stocks that now make up my portfolio. These are really fantastic businesses. And I’m very happy to own a very small slice of all of them. They have competitive advantages that allow them to, over longer periods of time, grow their profit and dividends, which in turn grows my wealth and income.

My main goal with the Fund, however, is to grow my passive dividend income. Stock prices go up and stock prices go down (I usually prefer the latter), but it’s really the dividend income the Fund generates that is the backbone of the financial freedom that affords me my lifestyle.

So I’ll go over the transactions from the prior month, showing what I bought (or sold), along with a little discussion on the thought process behind these transactions.

There were only two transactions during the month of December. And both of them involved small additions to existing positions.

I first purchased 15 shares of VF Corp. (VFC) on 12/15/16 for $53.51 per share.

VF Corp is a fantastic apparel company that’s been around for more than 100 years.

They own over 30 different brands, including five that exceed $1 billion in annual revenue: The North Face, Timberland, Vans, Wrangler, and Lee.

The fundamentals across the board are fantastic. This is just a really well-run business. And most important to my goals and lifestyle, VF Corp. has increased its dividend for 44 consecutive years. This is a premier dividend growth stock.

I took a look at the valuation for VFC not too long ago, concluding that a reasonable estimate of its intrinsic value was north of $70 per share. It appears to be a great dividend growth stock available for a great price. As such, I think it’s a very strong long-term investment here.

This purchase adds $25.20 to my annual dividend income.

My second and last transaction of the month (and year!) involved me purchasing 10 shares of CVS Health Corp. (CVS) on 12/29/16 for $79.18 per share.

CVS needs no introduction. As one of the nation’s largest pharmacy retailers and pharmacy benefit managers, you almost can’t go a day without seeing or dealing with CVS.

They’re a monster in their space, but the best news of all is that they continue to hand out monster dividend increases. In fact, they just very recently announced a 17.6% increase to their dividend, the 14th consecutive year in which they’ve raised their dividend. As a business partner, that’s music to my ears.

CVS, like VFC, sports a yield right now that’s approximately 100 basis points higher than its five-year average. Again, music to my ears.

I believe the stock is worth substantially more than it’s being sold for right now, so I saw this as an opportunity to average down on a high-quality business.

This purchase adds $20.00 to my annual dividend income.

Netting everything out, I added $45.20 to my annual dividend income.

It’s not much, but it’s money that’s going to come in regardless of what I do. I wake up, go about my day, do what makes me happy, and get paid. It’s pretty much the best job ever. Moreover, that $45.20 will surely organically grow year in and year out as these businesses make more money and share more of that with their respective shareholders.

The Fund is now worth $319,457.72, and it’s spread out across 106 positions. That’s a 3% increase over last month’s published value of $310,239.95. The Fund is on pace to generate $10,808.51 in dividend income over the next 12 months.

All in all, I’m pretty happy with this past month. Wasn’t much going on, which is really my style. Added just a few shares to two really strong businesses while they’re priced attractively. Can’t ask for much more than that.

I also made a big change to the Fund’s spreadsheet.

I changed the last column from a yield column to an income column. So instead of showing the yield of each respective position (which can be found using any stock quoting site), the last column now shows the annual income for the corresponding position.

This may end up supplanting my usual monthly passive income updates, since the annual income can now just be averaged out (on a monthly basis) at any given time. Makes things easier for everyone. It also allows me to divert some of my time, attention, and energy toward my coaching service, which is an incredible new service that I’m having a lot of fun with. As I discussed not too long ago, I plan on making things a lot less about me and a lot more about you guys.

In that spirit, I may even end up publishing a Full-Time fund update like this just once per year, preferring to instead just keep the spreadsheet itself updated monthly and then going over transactions and reasoning at the beginning of each year (reflecting the prior year’s activity).

Looking out over the next month, I still see some appealing dividend growth stocks, even with the broader market near its all-time high. Abbott Laboratories (ABT) and Diageo PLC (DEO) are just a couple examples. I continue to see more and more opportunities to divert my free cash flow elsewhere, however, so we’ll see how much I invest over the next month or so. I’m financially independent now (at a very young age), so the urgency to aggressively invest isn’t really there any longer. However, I’m just barely there, so I’m still interested in bolstering my position as I go (on top of the organic passive income growth achieved via dividend growth).

As a final note, I recommend using Personal Capitalto manage your portfolio. It aggregates your accounts and gives you powerful visualizations that are actionable. The best thing of all is that it’s free!

How was December? Did you finish the year strong? Any attractive dividend growth stocks on your radar? Are you interested in building your own Full-Time Fund? Check out my financial independence coaching service.

About Jason Fieber

Jason Fieber became financially free at 33 years old through a combination of hard work, frugal living, strategic entrepreneurship, intelligent investing, and geographic arbitrage. He currently lives his early retirement dream life in Thailand. Jason has authored two best-selling books: The Dividend Mantra Way and5 Steps To Retire In 5 Years (also available in paperback).

Nice work picking up VFC, have been watching them for quite some time and can’t deny the brand strengths, loyalties oh… and their dividend track record.

Pumped to see what height you can take your div income this year, with growth and reinvestment alone – should be able to add between $750-$1K; and that’s not including new/fresh capital. Will you be coming out with a goals article?

Congrats on finishing the year strong and best wishes for a killer year for you!

VFC is a really strong business. Apparel isn’t my favorite area, but there’s no doubt that VFC has navigated those waters well for a very long time. And it’s not like people can go walking around naked. Gotta own clothes. 🙂

Yeah, the snowball is rolling now. It feels great to be able to let my foot off the accelerator, focus on other things, and still watch the income grow. I’m not sure how much fresh capital I’ll be adding to it, but I suspect that the bulk of the growth will be coming via dividend increases. Of course, even $750 in dividend income growth would be equivalent to me adding more than $20,000 in fresh capital (at a 3.5% yield). So the thing is really moving now. It was always my aim to get it to this point, slow down a bit, and see what else I was capable of. I honestly couldn’t be happier.

That’s a good question there about goals. I’m not sure if I’ll do something like that or not. My life has really changed a lot. I’m just kind of waking up, really enjoying things, and letting opportunities happen here and there. Things are lot more serendipitous for me now, rather than forced. And I certainly don’t have any goals in mind in terms of a investing a certain amount of money. In fact, I would say I don’t think about money all that much (other than when I’m writing articles or coaching). Setting and achieving goals was an important part of the journey that got me here. But it’s all a bit different now. We’ll see. Maybe I’ll instead write about not setting goals… about just enjoying your life after you’ve achieved so many things you set out for.

Congrats on the new purchases! I took a long,lazy break from purchasing individual funds, and was pumped to see that my snowball is beginning to roll on its own, too. With some fresh capital, I think 2018 will be the year I cross $10k which is MUCH sooner than I anticipated. I’m stoked.

CVS, NOV, and INTC are currently on my short list. Somehow I never came across VFC but the fundamentals look really compelling. Thanks as always for the tip 🙂

Solid results all around in terms of your fund growth as well as the passive income it should generate in the coming year. VFC has been making the rounds as of late among our peers. I added some not long ago as well as to my DEO. If I see UL under $40 it will pique my interest once more. I’ll be posting my divvy results soon. Look forward to another year of investing and dividend growth!

I don’t really follow many blogs out there, but it’s great that others are investing in VFC. I think it’s a great business. And shares in it are available at a pretty attractive price. It’s been featured in my undervalued series a few times now. Not much to dislike here. 🙂

Best of luck with the investing this year. I’m not sure how much capital I’ll put away, but I’m so fortunate to have the money working very hard on my behalf. I tell the money to take a break sometimes. But it never listens.

Good Day Jason
enjoyed the update on your freedom fund. Glad you were able to add to the fund with the purchases of CVS, and VF Corp. Looking at adding DEO to mine portfolio maybe some BP or RDS.B to help diversify my portfolio. Looking forward to more additions in the freedomfund over time. just curios what you think of the big oils currently, which maybe the better one at this time. wishing you a happy new year and a prosperous
Cheers Michael

Compounding is incredibly wonderful. I think I might write a post about what the snowball effect looks like for me these days. It’s so motivating to see what money can do when it starts working for you. 🙂

Hi Jason,
thank you very much for sharing the Full-Time Fund update. While I understand that you want to focus on your coaching service and reduce the update frequency, I would very much miss the monthly updates of your Full Time Fund.
Regards,
Dividend Income Builder

Well, there’s nothing to really miss. I’ll still keep the spreadsheet updated monthly, so it’s all there for anyone to check out. And if you follow me on social media, I post/tweet buys/sells pretty much right as they occur. These updates are really just going over information that’s already out there.

When I originally conceived the concept of this site, I wasn’t even planning on doing posts like this at all. I wanted it to mostly be about the philosophy of life after financial independence. And I knew I wanted to somehow work directly with people. But I figured it made sense to at least show what financial independence looks like for me in real-time. Now that I’ve done that, I can focus on some other things. 🙂

Well written article Jason, really enjoyed it. It’s impressive to see the success of your porfolio and it’s growth. I may have to take a break from my DGI for a while and maybe focus on paying down some mortgage principal while we have low interest rate but I may sneak one more purchase… looking at NGG, UL, VFC & CLDT. Decisions, decisions.

Jason, as a long time follower I’d hate to see the monthly update to go away in place of yearly updates. I’d like to suggest Full time fund quarterly updates. Please do this in place of just one yearly article, but I know your time is valuable. I just enjoy these

Yeah, perhaps a quarterly update could work. We’ll see how the coaching goes. But I quite honestly enjoy the coaching and freelance stuff more than blogging, which is why I’ll probably continue to spend more time there. But it’s not so much just managing time as it is managing focus. I want to really make things more about you guys. And it’s hard to do that if a good chunk of the content is just updating everyone on my money. 🙂

Jason, I am so happy to have found your blog today and read about all your successes. I love your energy and passion toward saving and investing. You are an inspiration! I’m sure your coaching business will take off! 😀

I was wondering if there is an option to have dividend income just reinvested for your investments or if you are only paid out monthly or annually?

Appreciate the kind words. I really want to be there for people. I think there’s a lot of value in personal motivation and inspiration. If I can make a difference, I’m a happy camper.

As for your question, one could set their accounts up (depending on the brokerage) to DRIP (automatic dividend reinvestment). I never did that. I’ve always preferred to collect my dividends and then reinvest my capital as I see fit. If I’m competent enough to invest fresh capital, I’m competent enough to invest the capital that’s pooled from dividends received over a certain period of time.

I wrote this article a while back that talks about DRIP versus selective dividend reinvestment:

The frequency of dividends depends on the company. Some pay monthly. Most pay quarterly. There are some out there that pay semi-annually or annually. But because I have so many stocks (over 100), I’m essentially collecting a dividend a day now. It’s pretty awesome!

Jason, congrats on a great month. I know you discussed why you prefer taxable account investing on your previous site and why you were not in favor of tax-preferential accounts. I am curious if your strategy has changed now that you reached FI. To me, I’d probably start contributing some of my new cash into a Roth account to avoid taxes on the compounding dividends, especially since you no longer need them to support your life. Perhaps you don’t plan on your income being high enough that tax strategies will be meaningful, but you never know. You could be accidentally making 200k/yr in 5 years if you continuing making great content. What are your thoughts?

My strategy/vision hasn’t changed. If I end up with far more money than I need, that’s a wonderful problem to have. But my mindset isn’t focused so much on me and my money anymore. I’m rather thinking about how I can help others, which has resulted in my views on philanthropy, coaching, etc. So if I end up making something crazy like $200k/year (very doubtful), I’d end up giving away most of it.

But I still want maximum flexibility. I still want to be able to work when I want, with whom I want, on what I want. Everything I’m currently doing, I’m doing because I want to (not because I have to). And that’s achieved because I have maximum flexibility. Keep in mind, too, that I’m just barely financially independent here, as I’ve noted quite a bit. So I continue to invest in order to create a larger margin of safety. If I were to start pounding the retirement accounts, I wouldn’t be able to achieve that (not without additional potential headaches).

However, I say to each their own. And I’ve always said that what I’m doing isn’t necessarily something that should be replicated by anyone else. But it got me here pretty quickly, so I have zero regrets. 🙂

Hey Jason congrats on living life on purpose and breaking all time highs with the dividend income. I’ve been tracking my dividends for a long time and every year I manage to increase mine. Keep on motivating others to reach for new highs. Good luck in 2017.

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About Me

I'm Jason Fieber, Mr. Free At 33. I became financially free at 33 years old by working really hard, living well below my means, engaging in strategic entrepreneurship, intelligently investing, and using geographic arbitrage to my advantage. I currently live in Thailand, where I'm making my early retirement dreams come true. I write and coach so that I can help others make their early retirement dreams come true.

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